Risk , Issue , Assumption , Constraint and Key Takeaways

 

Notes on Key Project Management Terms

1. Risk:

   • Definition: Potential events or situations that may occur in the future and impact the project's success.
   • Types:
     • Negative Risks (Threats): Increase costs, delay schedules, or reduce functionality.
       • Example: A vendor might deliver late, causing project delays.
     • Positive Risks (Opportunities): Reduce costs, shorten schedules, or improve functionality.
       • Example: A permit expected in six weeks is approved in two weeks, speeding up the project.
   • Key Actions:
     • Identify risks during project planning.
     • Document risks in a Risk Register.
     • Develop response plans for each risk.
   • Relationship to Issues: A risk becomes an issue if it materializes.

2. Issue:

   • Definition: Problems or challenges that have already occurred and impact the project.
   • Examples:
     • A storm delays outdoor work.
     • A vendor's driver is sick, postponing a scheduled delivery.
     • A permit is delayed by 10 weeks.
   • Key Actions:
     • Document issues in an Issue Log.
     • Address issues promptly to minimize project disruption.
   • Difference from Risks: Risks may happen, while issues have already happened.

3. Assumption:

   • Definition: Statements believed to be true or valid for planning and decision-making.
   • Examples:
     • Assuming a network can handle IP phones without testing.
     • Assuming newly purchased computers meet minimum hardware requirements for software.
     • Assuming walls are ready to paint without inspecting for holes.
   • Key Actions:
     • Document assumptions in an Assumption Log.
     • Verify assumptions during project execution when possible.
   • Risks of Assumptions: Incorrect assumptions can lead to project issues.

4. Constraint:

   • Definition: Limitations or restrictions affecting project planning and execution.
   • Examples:
     • Time: Limited deadline to complete the project.
     • Budget: Fixed amount of money allocated to the project.
     • Resources: Limited availability of skilled personnel or equipment.
   • Key Actions:
     • Consider constraints when creating project plans.
     • Adjust project scope, schedule, or resources to align with constraints.

5. Key Takeaways:

   • Risks are potential future events; issues are problems that have already occurred.
   • Assumptions are unverified beliefs used for planning; incorrect assumptions can cause issues.
   • Constraints are limitations that must be considered in project planning.
   • These terms are interrelated and critical for effective project management.

Summary Example:

As a project manager, you might assume new computers meet hardware requirements (assumption), but later discover they don’t (issue). A risk, such as a vendor delivering late, becomes an issue when it materializes. Meanwhile, you must manage constraints like a fixed budget while addressing these challenges. Understanding and documenting risks, issues, assumptions, and constraints ensures better decision-making and project success.